The paper analyses the motives behind trade use credit in the Polish enterprise sector, based on the results of the 2016 NBP Annual Survey. It verifies the conclusions stemming from trade credit theories regarding both the main motives driving supply and demand for trade credit, as well as...

We quantify the importance of trade credit chains for the propagation of corporate bankruptcies. Our results show that trade creditors (suppliers) that issue more trade credit are more exposed to trade debtor (customer) failures, both in terms of the likelihood of experiencing a debtor failure...

The industrial organization of developing countries is characterized by the pervasive use of subcontracting arrangements among small, financially constrained firms. This paper asks whether vertical integration relaxes those financial constraints. It shows that vertical integration trades off the...

In this paper we examine trade credit terms in Italy on the basis of two original surveys carried out by the Bank of Italy. The surveys show that 80-90 per cents of sales are paid on a deferred payment basis of 90 days on average and a delay of 11 days. 83 per cent of trade credit is extended on...

This article proposes an agency model to explain the trade credit offer to clients. Our model is based on the existence of asymmetric information between sellers and buyers, which results in the appearance of two phenomena known as adverse selection and moral hazard. The former has already been...

This paper makes some selective comparisons of the empirical evidence relating to financial discipline and soft budget constraints in the enterprise sector in China and the transition countries of Central and Eastern Europe and the former Soviet Union (CEEFSU). The paper finds that: (1) in both...

This paper is a reply to Barry Ickes' critique of my paper 'Trust versus Illusion: What is Driving Demonetization in Russia?' in which I show that the data reject Barry Ickes' Virtual Economy explanation of barter in Russia in favor of an institutional explanation based on the lack of trust.

The virtual economy argument for Russia suggests that barter allows the parties to pretend that the manufacturing sector is producing value by enabling this sector to sell its output at a higher price than its market value. We confront this prediction with the actual pricing behavior of...

This paper is a reply to Barry Ickes' critique of my paper “Trust versus Illusion: What is Driving Demonetization in Russia?” in which I show that the data reject Barry Ickes' Virtual Economy explanation of barter in Russia in favor of an institutional explanation based on the lack of trust.